Ethereum came
under renewed pressure as escalating Middle East tensions weighed on risk
sentiment. The weakness began late yesterday following reports that the US
military was reducing its troop presence at bases across the region, while the
State Department ordered staffing cuts at diplomatic posts amid rising security
risks and the possibility of renewed military action against Iran.
The selling
pressure intensified after The New York Times reported that the US and Israeli
militaries had developed detailed plans for potential strikes on Iran following
the US midterm elections. The report also said that the US was building up its
military presence, with three aircraft carriers, thousands of Marines, fighter
jets and special operations units expected to be fully deployed by early
November.
The prospects of
another direct conflict amid increasing growth concerns and a hawkish Fed are
all strong bearish drivers for the crypto market. Tomorrow’s US Flash PMIs
could be another major catalyst given lingering growth concerns.
Weaker-than-expected
data could intensify growth fears, weigh further on risk sentiment and trigger
a selloff in Ethereum. Strong data, on the other hand, could alleviate fears of
an economic slowdown and lead to a short-term relief rally, but it wouldn’t
change the bigger picture as it would just reinforce the need for rate hikes.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumis pulling back a bit after
the escalation in the Middle East tensions. If we get a pullback into the major
trendline and the 2,360 support, we can expect the buyers to step in, with a
defined risk below the trendline, to position for a rally into the 3,400 level.
The sellers, on the other hand, will want to see the price breaking below the
trendline to open the door for new lows and target the 1,900 level next.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price is breaking below the minor upward trendline that was defining
the recent bullish momentum. We can expect the sellers to pile in on the break,
with a defined risk above the trendline, to extend the pullback into the major trendline.
The buyers, on the other hand, will be better off waiting for the price to fall
into the major trendline to have a better risk to reward setup.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here, although we have a minor downward trendline that
could act as resistance in case we get a slight pullback. The sellers will likely
continue to lean on the trendline, with a defined risk above it, to keep
pushing into new lows. Some aggressive buyers, on the other hand, might wait
for a break higher to start positioning for a rally into the 2,577 level next. The
red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the latest US
Jobless Claims figures, while tomorrow we conclude the week with the US Flash
PMIs.
This article was written by Giuseppe Dellamotta at investinglive.com.